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Govt to review new tariffs on crude, diesel, and ATF every two weeks: FM

Govt to review new tariffs on crude, diesel, and ATF every two weeks: FM

''We need to take this twin-pronged approach,'' Union Finance Minister Nirmala Sitharaman added.

Govt to review new tariffs on crude, diesel, and ATF every two weeks: FM Govt to review new tariffs on crude, diesel, and ATF every two weeks: FM

Finance Minister Nirmala Sitharaman on Friday said ''phenomenal profits'' made by some oil refiners on exporting fuel at the expense of domestic supplies had prompted the government to introduce an export tax on petrol, diesel and ATF.

The export levy as also the windfall tax imposed on record profits of domestic oil producers will be reviewed every fortnight to calibrate them if the need arises, she told reporters here.

She said the new taxes are aimed at improving the supply of petroleum products in the domestic market, as private producers were mainly focussing on exports.

The government on Friday slapped an export tax on petrol, diesel and jet fuel (ATF) and imposed a windfall tax on crude oil produced locally.

''Every 15 days, this will be assessed to see how things are working out,'' the minister said.

Sitharaman said that currently, India is facing difficulty in getting crude oil from abroad at an affordable price.

Observing that at a time when oil prices are ''unbridled'' internationally and domestic exporters are making ''phenomenal profits'', she said it is essential to ensure enough domestic supplies.

India imports 85 per cent of its crude oil requirement.

''These are times when oil prices internationally are unbridled. They are just going on and on upwards. And for any country, like India for instance, which depends largely and very much largely on imports, we also need to pay that kind of money to get the imports,'' Sitharaman said.

She said crude oil exports from India are happening at ''abnormal'' prices, which is resulting in ''extraordinary profits''.

''We do not grudge people earning profits,'' she said, adding at the same time there is a need to ensure enough supply within the country.

Sitharaman said there are reports that petrol pumps owned by private companies are not selling enough fuel to domestic customers.

India buys crude oil from different places from ''cost-effective'' options and also reduces excise duty so that the cost of petrol and diesel remains low and the burden on the ordinary citizen is less, she added.

''But with all these being done, if oil is not being available and they are being exported, good they are exported but exported with such phenomenal profits. Good for earning profits, but extraordinary times. We need at least some of it for our own citizens and that is why we have taken this twin-pronged approach.

''It is not to discourage exports, it is not to discourage India has a refining hub, it is certainly not against profit earning, but extraordinary times do require some such steps,'' Sitharaman said.

The government on Friday imposed a Rs 6 per litre tax on the export of petrol and ATF and a Rs 13 per litre tax on the export of diesel effective from July 1.

Additionally, a Rs 23,250 per tonne tax was levied on crude oil produced domestically.

Revenue Secretary Tarun Bajaj said the new taxes would be applicable on SEZ units.

''But, the export restriction will not be applicable,'' he said. The government also framed new rules requiring oil companies exporting petrol to sell in the domestic market, the equivalent of 50 per cent of the amount sold to overseas customers, for the fiscal year ending March 31, 2023. For diesel, this requirement has been put at 30 per cent of the volume exported.

These restrictions on export are also aimed at shoring up domestic supplies at petrol pumps, some of which had dried up in states like Madhya Pradesh, Rajasthan and Gujarat as private refiners preferred exporting fuel to selling locally.

 

Also read: Govt slaps Rs 23,230 per tonne additional tax on domestically produced crude oil

Also read: Petrol, diesel prices remain constant across metros; LPG cylinder rates slashed on July 1 

Published on: Jul 01, 2022, 2:47 PM IST
Posted by: Soumyashis Prashanth, Jul 01, 2022, 2:42 PM IST